ALJDEC decisions subject to certification as final

2018A-3209-NPC-ROC · Registrar of Contractors · 2018-10-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 2, 2018 APPEARANCES: Ryan McDermott appeared on behalf of Complainant McDermott Construction, LLC. No one appeared on behalf of Respondent Gramling Development, LLC. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson FINDINGS OF FACT 1. On August 23, 2018, the Registrar of Contractors, (“Registrar”), issued a Notice of Hearing setting the above-captioned matter for hearing at 1:00 p.m. on October 2, 2018, at the Office of Administrative Hearings in Phoenix, Arizona. 2. No representative for Respondent Gramling Development LLC, (“Gramling”), appeared at the scheduled time and the matter was convened in its absence at about 1:20 p.m. 3. Gramling holds license number 180270 issued by the Registrar. 4. On or about September 6, 2016, Complainant McDermott Construction, LLC (“McDermott”) entered into a contract with Gramling wherein McDermott agreed to provide labor and materials for a construction project located at 10435 E. Balancing Rock Road, Scottsdale, AZ (“Fierro Project”). 5. On or about April 13, 2017, McDermott entered a contract with Gramling wherein McDermott agreed to provide labor and materials for a construction project located at 25072 N. 107th Lane, Scottsdale, AZ (“Pajak Project”). 6. McDermott submitted an invoice in the amount of $485 to Gramling for labor and materials provided to Gramling at the Fierro Project. 7. McDermott submitted an invoice in the amount of $8,682.08 to Grambling for labor and materials provided to Gramling at the Pajak Project. 8. The total amount of the invoices was $9,167.08. 9. Grambling failed to pay the invoices when payment became due under the contract. 10. On July 13, 2018, the Registrar received a complaint filed by McDermott against Gramling alleging that Gramling failed to pay its bills in the total amount of $9,167.08. 11. On July 27, 2018, the Registrar issued a Citation alleging that Gramling may have violated Ariz. Rev. Stat. section 32- 1154(A)(10). 12. On or about August 3, 2018, Gramling filed a timely answer to the Citation. 13. At hearing, Ryan McDermott testified on behalf of McDermott, and

submitted exhibits A through E. 14. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized member, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its licenses. 15. Administrative notice is taken of Respondent’s prior License record on October 19, 2018. Such prior License record reflects that Respondent’s License No. 180270 was first issued on November 12, 2002, and is suspended. Such prior License record also reflects that there are two open complaints pending against the license, and one case has resulted in discipline against Respondent’s license.

CONCLUSIONS OF LAW 1. A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. A.A.C. § R2-19-119. 2. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. section 41-1092.07(G)(2). 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014). 4. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. section 1-211(B). 6. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 7. Ariz. Rev. Stat. section 32-1154(A) provides that: The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: …. 10. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

8. Ariz. Rev. Stat. section 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” 9. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.[1] 10. The preponderance of the evidence shows that Gramling violated Ariz. Rev. Stat. section 32-1154(A)(10) as alleged. ORDER IT IS ORDERED that on the effective date of the final order in this matter, Gramling Development, LLC’s license number 180270 number is revoked unless the Registrar receives and accepts written verification that Gramling Development, LLC has paid to McDermott Construction, LLC $9,167.08 in certified funds. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order is forty days after the date of that certification. Done this day, October 19, 2018.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984).

-----------------------

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826